The mural is being painted on the Walgett Water Tower in recognition of the well-known musician.

Mr Little, who lived in Walgett for a time, was the first Indigenous Australian to receive mainstream music success. His most popular song was released in 1963.

The musician was voted a National Living Treasure in 2004 and awarded the APRA prestigious Ted Albert Award for this Outstanding Services to the Australian Music Industry in 2010.

Mr Little's daughter Frances Peters-Little said she was thrilled by the decision to pay tribute to her dad and recognise his contribution to reconciliation, Indigenous health and education programs.

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The painting will be based on a photograph by John Elliott, who also took iconic photographs of Australian country music artists like Slim Dusty, Keith Urban, Troy Cassar-Daley.

Walgett Shire Council has commissioned Zest Events International to complete the mural.

The portrait itself will be created by Jenny McCracken who has been part of the company since 2003.

The background has been designed by local Gamileroi artist Frank Wright. It will include a river system map of the area and local totems.

Walgett Shire Council general manager Michael Urquhart said the Jimmy Little Memorial mural would join the growing number of silo and water tower trails in NSW.

"The Walgett tower would be a welcomed addition to the region's trail with water tower paintings already in Coonamble and Gulargambone to the south," he said.

"The paintings are having a phenomenal effect on the sustainability of these small towns through increased visitor numbers."

A mural of Hugh Bowman and racehorse Winx is also under way on a silo in Dunedoo.

Speaking to the Daily Liberal when the mural was first announced, Ms Peters-Little said it was an "absolute honour" and her parents would be incredibly proud.

"They loved Walgett dearly. It was very close to their heart... and for me personally I am thrilled to pieces. I am about to become a grandmother... when you become a grandmother you start to think about the legacy that passes on," she said.

"I know that I am going to have a grandchild that can look upon this [mural] and say 'that is my great-grandfather' and that will continue."